Capital Structure Dynamics in UK and Continental Europe
Posted: 26 May 2002
Date Written: February 2002
This paper analyzes capital structure determinants of UK and continental European firms. Besides considering firm-specific characteristics, it looks at the impact of different corporate governance systems on the capital structure choice. The dynamic framework allows to analyze the adjustment processes taking place over time. Our data contain balance sheet and profit & loss account data of 167 European firms from 1988 to 1998. We use fixed erects and moving window regressions and find significant differences in the capital structure choice with respect to characteristics of the firms as well as of the considered corporate governance systems. Also, we find significant changes in the firm behavior over time.
Keywords: capital structure, corporate governance, panel data, dynamic analysis
JEL Classification: G32, C23, D21
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